European shares hold steady

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Paris - European shares were steady in early trade on Wednesday, pausing after a 2-1/2 week rally, with data showing German consumer morale falling for the first time in more than 1-1/2 years denting investors' appetite for stocks.

The impact of the Ukrainian crisis and tensions between the West and Moscow were visible again in European company results on Wednesday.

Marine Harvest, the world's largest salmon farmer, said it expected Russian sanctions to pose short-term challenges.

Its shares fell 1.1 percent.

Market research group GfK said on Wednesday its forward-looking consumer sentiment indicator, based on a survey of around 2,000 Germans, fell to 8.6 going into September from a downwardly revised 8.9 in August.

It was the biggest drop in more than three years and below the consensus forecast in a Reuters poll of 30 economists for 9.0, undershooting even the most pessimistic estimate of 8.7.

GfK said it was the first decline since January 2013.

French stocks slightly underperformed, with France's CAC 40 dipping 0.3 percent, trimming recent sharp gains.

After the close on Tuesday, France's President Francois Hollande replaced his maverick leftist economy minister Arnaud Montebourg with Emmanuel Macron, a former Rothschild partner, in a reshuffle aimed at reconciling his efforts to revive the stagnant French economy with deficit-cutting orthodoxy.

At 09:25 SA time, the FTSEurofirst 300 index of top European shares was 0.02 percent higher at 1,377.12 points, following a 6 percent rally since August 8.

“European indexes have pierced all the resistance zones such as the trend lines, the 50-day and 200-day moving averages, the 50 percent retracement levels of the latest correction. They're now set to revisit 2014 highs,” Aurel BGC analyst Gerard Sagnier said.

European stocks have rallied as fears of an escalation in the Ukrainian crisis eased and comments from European Central Bank President Mario Draghi fuelled speculation the ECB could embark on a large-scale asset-buying scheme to revive inflation.

Late on Tuesday, Ukrainian President Petro Poroshenko promised after negotiations with Russia's Vladimir Putin to work on an urgent ceasefire plan to defuse the separatist conflict in the east of his former Soviet republic.

Speaking on Friday at a global central banking conference in Jackson Hole, Wyoming, ECB President Mario Draghi said the central was prepared to respond with all its “available” tools should inflation drop further.

Germany's Finance Minister Wolfgang Schaeuble told a newspaper on Wednesday that European Central Bank chief Mario Draghi had been “over-interpreted” after suggesting that fiscal policy could play a greater role in promoting growth. - Reuters



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